Private equity firms are making life difficult for investors because of the opaque way in which they present data and their unsophisticated reward structures, according to a survey of European institutions.

AltAssets, the specialist UK research and publishing group behind the report, surveyed 110 European institutions including pension funds, insurance companies, corporations, banks and asset management firms, managing a combined E3,000bn ($1,873bn) in assets, of which E89bn was allocated to private equity.

Richard Sachar, chief executive of AltAssets, says: "General partners [of private equity firms] will tell you how terribly difficult it is to get money from limited partners [institutional investors] these days. But our study shows they are investing. They are just a lot more discerning, and it is up to general partners to connect."

Two-thirds of the study's respondents said that a lack of transparency - particularly a dearth of standardised and comparable data - was the biggest obstacle to investing in private equity.

A significant number of those surveyed also complained about the expense of grappling with a complex asset class.

However, the high fees charged by private equity groups did not concern worried investors as much as had been expected, Mr Sachar said.

The main concerns, however, centred on management fees, which were often seen as excessive for large funds.

While recent bad performance in buy-out and venture portfolios appears to have made investors more discerning, it had not put most of them off the asset class altogether, with 42 per cent of those surveyed expecting to raise their allocation. Public and corporate pension funds were most likely to forecast an increase. UK and Scandinavian limited partners were the most enthusiastic, with French and Benelux investors the least keen. *The Limited Partner Perpsective: A survey of institutional investors. Contact: www.altassets.net

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